Define: Securities Dispute Resolution: Experts

Experts are individuals who can provide their opinions on various matters concerning securities disputes. They are capable of clarifying intricate transactions and offering supporting information for claims made by either the claimant or the defendant. The decision to employ an expert is influenced by factors such as the nature of the claim and the cost of the expert in relation to the claimed amount. The Financial Industry Regulatory Authority (FINRA) has established regulations regarding experts, including granting the arbitration panel the authority to determine whether an expert witness can testify. Once permitted to testify, the party who called the expert conducts a direct examination by posing questions, while the opposing party has the opportunity to question the expert through a cross-examination. The arbitrators also have the right to question the expert.

Experts are individuals who can provide their opinions on various issues related to securities disputes. They can offer necessary information to support claims made by either the claimant or the respondent. Experts can help explain complex transactions and provide expert testimony to support a party’s case. For example, in a securities dispute, an expert may be hired to provide an opinion on the management of an account or the calculation of profits. The decision to hire an expert depends on several factors, such as the type of claim or defence being made, the cost of the expert compared to the amount claimed as damages, and the need for expert testimony compared to background information.

The Financial Industry Regulatory Authority (FINRA) has established rules regarding experts in securities disputes. These rules include:

– Rule 9263: This rule allows the Hearing Officer to exclude irrelevant, immaterial, unduly repetitious, or unduly prejudicial evidence, including expert testimony.
– Rule 9242(a): This rule empowers the Hearing Officer to order a party to provide an expert’s qualification statements, publications, and involvement in other proceedings.
– Rule 9242(b): This rule prohibits a former officer of FINRA from testifying within a year of leaving FINRA.
– Rule 12602 (for customer disputes) and Rule 13602 (for industry disputes): These rules permit expert witnesses to attend all hearings unless there are persuasive reasons to the contrary. The arbitration panel ultimately decides whether to allow an expert witness to testify.

The standards used in litigation can serve as a helpful guide for determining the admissibility of expert witnesses. Federal courts may allow expert witnesses to testify if their knowledge helps the trier of fact understand the evidence or determine a fact in issue, the testimony is based on sufficient facts or data, the testimony is the product of reliable principles and methods, and the witness has reliably applied the principles and methods to the facts of the case. State courts may have different rules in place. Arbitrators, however, are not bound by either federal or state standards when evaluating an expert.

Once an expert witness is permitted to testify in arbitration, the party that called the expert conducts a direct examination by asking questions to the expert. The opposing party then has the opportunity to question the expert through a cross-examination. The arbitrators themselves may also question the expert.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 17th April 2024.